Egyptian army’s ouster of President Morsi to further polarise politics, may usher economic stability

By bne IntelliNews July 4, 2013

Egyptian army’s orchestrated military intervention into politics framed as acting in compliance with the popular will to depose elected President Mohamed Morsi may further polarise the political scene. Shortly after the expiry of the military’s ultimatum to political forces to reach national reconciliation, armoured personnel carriers were rolling on the streets of Cairo encircling squares where the pro-Morsi camp had been stationed. Defence minister Abdel Fattah El Sisi gave a speech to the nation surrounded with top military brass; Sheikh Al Azhar Ahmed El Tayeb, head of the highest Sunni Muslim religious authority; Pope Tawadros II, head of the Coptic Orthodox Christian Church; Mohamed El Baradei, representing the liberal political opposition; a representative of the Salafi political opposition; members of the youth lead Rebel movement.

El Sisi declared that Egypt’s national political forces and the religious authorities have agreed on a political roadmap for the future on the following basis: the incoming President of the Constitutional Court, judge Adli Mansour, is to be appointed as interim president; suspension of the constitution; early presidential elections; formation of a national unity government; formation of committee represented by all parties to review constitutional amendments; work on including the youth in decision-making process; formation of a high commission for national reconciliation. Reaction from the pro-Morsi Islamist camp was expectedly defiant accusing the military to have ganged-up against the Islamist president in collision with their former revolutionary partners mainly the youth, the liberal and leftist opposition, businessmen associated with the former regime and the security apparatus. Having failed to negotiate a safe exit for Morsi, their political leadership has been put under house arrest and their media channels have been blocked. With personnel deployed on the street, the army seems to be taking no chances limiting the Islamist’s room to seize power back through violent means.

Setting the political stage for the future

While the ouster of elected President Mohamed Morsi from power is being framed by his Islamist supporters as a setback for Egypt’s nascent democracy, his opponents are asserting that they are acting to put the nation back on an inclusive political path away from the Muslim Brotherhood’s divisive politics that made Egypt’s political transition towards democracy deviate from the path of the January 25 2011 revolution that ousted former President Hosni Mubarak. Regardless how quickly the political roadmap depicted by the army is implemented, the ouster of President Morsi is likely to define Egyptian politics for years if not decades. The stage has been set for a broad coalition of liberal political forces huddled around the army facing a minority core of embittered Islamists grouped around the Muslim Brotherhood. Both camps already unable or unwilling to see eye to eye over fundamental rules of the political game are likely to get pushed further apart by the ouster of an elected president from the Muslim Brotherhood’s ranks, thus, further polarising the political scene.

Economic consequences

A clear guideline for transition towards an inclusive political system reinforced by the coercive power of the state represented by the armed forces is likely to be positive for investor confidence foreshadowed by the 5% jump in EGX 30, an index of leading firms, on the day the army issued its 48 hour ultimatum to all political forces to reach national conciliation. The presence of the army on the streets backing the police in the transitional period variously estimated to be between 6 months to a year is likely to address the key issue of lack of security, which in turn has been holding back tourist arrivals a key earner of foreign exchange for Egypt. A return of tourism to pre-January 2011 numbers is also critical because of that industry’s backward and forward linkages with a large number of other industries estimated to be employing directly and indirectly around 5mn people.

On the foreign aid front, the ouster of Mohamed Morsi will inevitably mean the loss of support from the generous coffers of a pro-Muslim Brotherhood Qatar, which has ran into USD 8bn over the past year. However, the fact that King Abdallah of Saudi Arabia has already voiced support for the Egyptian army’s intervention, it is conceivable that Saudi and other Gulf states will be much more forthcoming with cheque books in hand to assist Egypt. Saudi royals have felt threatened by the rise of the Muslim Brotherhood to power in Egypt, whose rhetoric might have emboldened the Islamist opposition in Saudi Arabia over the past two years. Lost in the sands of local politics are Egypt’s long running negotiations with the International Monetary Fund for a USD 4.8bn Standby loan agreement, which in the absence of a democratically elected government is likely to be pushed further into the unknown.

Regional fallout

The fallout from the inability of the Muslim Brotherhood to hold onto power through democratic means in Egypt, the centre of its transnational movement, will have wider ramifications throughout the Middle East. Today’s members of the Muslim Brotherhood will have to revise their political calculations with some concluding, like a bygone generation, that bearing arms is the only way to achieving their “Islamist Project”. While a younger and better educated generation may revolt against the autocratic ways the current leadership, dubbed as Qutbists after a leader of the movement in the 60s, has handled the Muslim Brotherhood’s first foray into the alleyways of political power.


Related Articles

EBRD prepares to welcome Lebanon into fold

The EBRD is set to welcome its 66th member country and the fifth from the southern and eastern Mediterranean (SEMED) region once the Lebanese government finalises the last steps of the joining ... more

Russia and Saudi Arabia to launch joint projects worth $3bn in 2017

Russia and Saudi Arabia will launch joint projects worth $3bn by the end of 2017, the speaker of Russia’s Federation Council Valentina Matviyenko said at talks with members of the Russian-Saudi ... more

Egypt’s President El Sisi to announce state of emergency after church bombings

Egypt’s President Abdel-Fattah El Sisi announced in a televised speech his intention to impose a nationwide state of emergency for three months following two deadly bomb attacks on Christian ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.